Law and Regulations Re: Realtors

Link to Elder Abuse

 

March 1, 2008

Last Revised:  May 23, 2012 4:50 PM

In California a "realtor" who has an official California License to be called and function as a realtor.

For instance, when a person who has a "realtor's license" advertises a house for sale or for rent, by law he must dislose certain information in his ad, or be in violation of his license, with consequences depending on the type of violation and the damage caused.

One example of that is in the "disclosure form" which a licensed mortgage lender or broker must abide by in rules laid out in a form called the RE 858, Advertising Disclosure Requirements.

Click here to review that form in a PDF format.

In a similar fashion a "real estate broker," or a "licensed real estate salesman" must have passed a test and been granted by the State of California, a "real estate broker's" license or a "real estate salesman's" license.

The broker's license, logically, requires more training for the indidual and a more thorough testing procedure. Likewise, a "real estate broker," per his license, is governed by more rules and more demanding behavior than a "licensed real estate salesman."

The information for an applicant eligibility for license as a realestate broker is here in another PDF format. After a person has successfully passed his State Realtor Examination, he then has one year in which to apply for his license. The license will be granted, or not, as described in the above link relative to the eligibility shown on the above linked form.

The actual license, sample of, is HERE.

 

A California State Web page that helps the consumer understand the dangers of working with an unlicensed realtor, or a realtor who is violaing his license is here:

 

Desist and Refrain Orders

Actions Taken Against Unlicensed Real Estate Activities

View the Unlicensed Activities listing of persons or entities that have been issued a Desist and Refrain Order for conducting real estate activity without being properly licensed. Check our on-line licensee database if you are uncertain about whether a person or entity is licensed.

When, for instance, you click the last above link and then enter the name "esposito" with the city "glendale," you quickly get a page that shows the BROKER license for "Edward L. Esposito" in Glendale, CA. as number 01709772 If you click on that number you get THIS PAGE.

One of the items on that page reads:

License Status -- Licensed NBA

If you then click on the link to find out what "NBA" means you get this explanation:

The license is in a non-working status. The licensee may not perform acts for which a real estate license is required in California. Salesperson reference for NBA is equivalent to 'No Broker Affiliation' and the broker/corporation reference to NBA is equivalent to 'No Business (current main office) Address'.

If his "status" was a regular "licensed Broker" his status would be described as:

The licensee is authorized to perform acts for which a real estate license is required in California. Licensed salespersons must be affiliated with an employing broker in order to perform acts for which a real estate license is required. Brokers/corporations must maintain a California main office address to perform acts for which a real estate license is required.

An interesting question then arises as to whether a "person" is a licensed broker, but whose license status is "NBA" (as defined above), is still bound by the broker's license in any of his dealings that would, otherwise, require specific actions or disclosures.

A first approach to the answer to that is the yellow highlighted area above that invites an interested person to Check if you are uncertain about whether a person or entity is licensed.

As mentioned above, when you put "esposito" into the box at the end of that link, you get a statement that he IS a licensed realtor.

If he IS licensed, but "not working" what does that mean? And, can he be a "licensed broker" and still have the NBA status?

First how would a person change from an NBA status to a regular working license?

Q. How do I change the NBA license status?

A. To change your license status there are two options:

Obtain a Change form from the DRE www.dre.ca.gov/chgforms.htm
And submit it via mail to
Sacramento DRE
2001 Broadway
Sacramento, Ca 95818

Or
Use the eLicensing system for expedited processing  https://secure.dre.ca.gov/elicensing/

When you click on the first option above, you get an explanation that

1. When a licensed real estate broker has "no business address" his status is shown as "NBA." He can change that status simply by supplying a business address in the proper form and channel. (found in the California Real Estate Bulletin, Fall 2004, as the only presence of "NBA" in that Bulletin).

2. If a person with a "Realtor License" (NOT a Broker's license) is no longer employed by a company with a licensed broker, that person is still a licensed realtor, but his status is "NBA," and he cannot function as a realtor. Reference

3. 5. In viewing my license status online, after processing my renewal, I notice that my status has become NBA (no broker affiliation — sales) or (no business address — broker). Why?

You are asked to answer a series of four questions as you start the eLicensing renewal process. One of the questions is “On renewal date, will you be engaged in real estate activities for which a California real estate license is required?”

If you answered NO to this question, the DRE will change your license to a non-working status.

If this not correct as you will be working, you will need to complete a Salesperson Change Application (RE 214) or a Broker Change Application (RE 204) available on the DRE Web site, under “FORMS.”

This is the only reference to NBA in the Cal Real Estate Bulletin of Winter 2003.

4. Here is another reference to NBA:

Wednesday, April 04, 2007

Century21 Su Casa

I was driving by Century21 Su Casa office at the crossing of Decoto and Fremont Blvd in Fremont, yesterday and took this picture.


According to this article . Century 21 officially revoked their franchise. In case you missed the article which started this, here it is.

Felipe Neri who was mentioned, as the agent that helped Luis Mapula and his wife buy a home he couldn't afford in the above article currently has his license status as NBA. He's no longer work for Bic Pho.

NBA per DRE is when the license is in a non-working status. The licensee may not perform acts for which a real estate license is required in California. Salesperson reference for NBA is equivalent to 'No Broker Affiliation' and the broker/corporation reference to NBA is equivalent to 'No Business (current main office) Address'.


Bic Pho's license is still valid. Still in business but he's no longer able to use the Century 21 name nor is Felipe Neri working for him anymore.

The small image below is the result of placing "Felipe Neri" into the State of California Web/box to find out what type of license he might have. He comes up no longer having a license in March 2008.

No matching public record was found for Licensee:
FELIPE NERI

It would be probably a good guess that he lost is license because of the improper activity described above, but that is not certain from this amount of research. Here is a public news story about Neri. He belonged in jail but the system of crooked realtors all running away from responsibility let him get away with crime.

 



Felepie was one of a bunch of crooked realtors with the famous Century 21. He is no longer a realtor but he had relatives and others who prospered from his crimes:

Gilberto Neri - Scam artist for sure - Review left by mike, Tuesday, January 15, 2008    
mike bought a home but would not recommend using Gilberto for your home purchase.
Comments: "this guy along with his family member felipe neri scamed millions of dollars from latino families. they normally sold listings to su casa agents and buyers were convinced to purchase su casa listings. now most of those agents are either in other real estate companies or with real estate companies afiliated to the su casa owners." Read full review
 
  Gilberto has not responded to this review  
 
 
Source

 

5. Does the NBA label suggest a less than trustworthy person to deal with? If Mr. Esposito has ads or web pages describing himself as a "realtor" is that illegal?

Here is a similar name listed on this web page which promotes real estate agents, as an real estate agent -- but further research did not connect this reference to "Edward L. Esposito:"

Edward Esposito

Santa Ana, California real estate agents

Send Secure Message
1st Choice Mortgage

Address:
1450 N. Tustin Ave. %23115
Santa Ana CA 92705

Source

Esposito certainly advertises himself as a "licensed realtor:"

Edward Esposito (Member) born Queens, New York, December 13, 1947; admitted to bar, 1993, California and U.S. District Court, Central District of California. Education: Fullerton College (A.A., 1977); Western State University (B.S., 1991; J.D., 1993). Licensed Real Estate Broker. Former Police Officer in Southern California (1973-1987). Member: Los Angeles County and Glendale Bar Associations. Practice Areas: Construction Law; Real Estate Litigation; Immigration Law. (source:

The well-known Martindale resource shows Esposito, also, as a "licensed BROKER:"

 



Practice Areas Construction Law; Real Estate Litigation; Immigration Law
 
Education Western State University, J.D., 1993, Fullerton College, A.A., 1977; Western State University, B.S., 1991
 
Admitted 1993, California and U.S. District Court, Central District of California
 
Memberships Los Angeles County and Glendale Bar Associations.
 
Born Queens, New York, December 13, 1947
 
Biography Licensed Real Estate Broker. Former Police Officer in Southern California (1973-1987).
 
ISLN 900597655

Can a "real estate broker" have the status of "NBA?"

Probably yes if he has no business address:

the broker/corporation reference to NBA is equivalent to 'No Business (current main office) Address'

Since Esposito seems to HAVE a business address (although he may not advertise any realty activity at that address) it would not seem that he could allow himself to be called a "broker" without an address.

 

This now brings up the question about what type of realtors there might be?

What is the difference between a REALTOR® and a real estate agent?

A: “Real estate agent” is a general term that refers to a variety of real estate professionals.  The Term “REALTOR®” refers only to real estate professionals who are members of the National Association of REALTORS® (NAR) and the California Association of REALTORS® (CAR).  NAR is the largest real estate trade organization in the United States. 
 

Q: Why is this small distinction important?
 
A: All REALTORS® must adhere to a strict code of ethics designed to protect the interest of the consumers and to elevate the standards of the industry.  While all real estate professionals must adhere to applicable laws, REALTORS® voluntarily agree to hold themselves to a higher standard.

 

Q: Can I join [CAR] if my License Status reflects Licensed NBA?

A: No, unfortunately, a License that reflects Licensed NBA is basically a non-working License.  Your License Status must reflect LICENSED.  In order to get this corrected you must as the sales agent go to www.dre.ca.gov and click on Salesperson additions/changes of employing broker, if you have not registered with a sign on you will need to create one.  You as the Salesperson must initiate the change and than your Broker must log on and certify the change.  Once this is complete you License Status should immediately reflect the new Status of LICENSED.

(04/2006)

 

Source


What are the DUTIES of a licensee realtor:

Disclosure
An agent must disclose to the principal all known relevant and material information that pertains to the scope of the agency. The duty includes any facts affecting the value or desirability of the property, as well as any other relevant information pertaining to the transaction, such as the other party's bargaining position, the identity of all potential purchasers, information concerning the ability or willingness of the buyer to offer a higher price, any intent to subdivide or resell the property for a profit.

An agent's duty of disclosure to his/her principal must not be confused with a real estate broker's duty to disclose any know material facts about the property value to non-principals. The duty to disclose known material facts is based on a real estate broker's duty to treat all persons honestly. The duty of honesty does not depend on the existence of an agency relationship. Source

 

The California Professional and Business Code, relating to attorneys is HERE.

The Attorney General of California, in an opinion referred to as 04-1201 provides data on the professional expectations of licensed realtors who are also attorneys -- HERE.

Here is a list of references to parts of the California Real Estate Law. This may well be the most valuable resource on this page:

 

Real Estate Business Guidance

 

In the link above for "disclosures" you will find the following:

A.  Disclosures Upon Transfer of Residential Property

This section deals with the major disclosures required by the California Civil Code (commencing at Section 1102). Subject to the exemptions listed below, these requirements apply when real property of 1 to 4 dwelling units is transferred by sale, exchange, installment land sale contract, ground lease coupled with improvements, lease with an option to purchase, or any other option to purchase.

In this discussion, the term “seller” means the transferor, the term “buyer” or “purchaser” means the transferee, and the term “transaction” includes the sale or transfer of the property.

In the above excerpt, quoted from the disclosures link, the term highlighted in yellow (lease with an option to purchase) indicates that the items which follow apply in a "lease-option" arrangement, and that and you will also see that ABOVE the two paragraphs of text is an instructive heading that refers to these actions as "transfer of residential property."

Thus it would appear that a "lease-option IS not only covered by the disclosure requirements at the link, but is also properly characterized as a "transfer of real property."

The disclosure data continues:

This section deals with the major disclosures required by the California Civil Code (commencing at Section 1102). Subject to the exemptions listed below, these requirements apply when real property of 1 to 4 dwelling units is transferred by sale, exchange, installment land sale contract, ground lease coupled with improvements, lease with an option to purchase, or any other option to purchase.

The exemptions that are then listed (available in the linked text) do not include anything of significance to our interests.

The disclosure data continues:

In this discussion, the term “seller” means the transferor, the term “buyer” or “purchaser” means the transferee, and the term “transaction” includes the sale or transfer of the property.

This part makes it clear that the "seller" also means the "transferee" and the "sale or transfer of property" is what is referred to as the "transaction.

The disclosure data continues:

The first listed penalty for violation of some aspect of the required disclosure has a short-termed window of opportunity:

1.   Termination Right.

Should delivery of any of these disclosures or an amended disclosure occur after execution of an offer or of a purchase agreement, the buyer has three days after delivery of the disclosure in person or five days after delivery by deposit in the United States mail to terminate the offer or the agreement by delivering a written notice of termination to the seller or the seller’s agent.

(Cal. Civ. §1102.3)

So the above penalty comes into play only when the "seller" or his agent, fails to disclose something listed in the document and the buyer complains with 3 days (or 5 by mail) to the seller, as shown.

More of the referenced text continues.

This next text may well cover a big issue.

 

2.   Real Estate Transfer Disclosure Statement

The Real Estate Transfer Disclosure Statement (TDS) describes the condition of a property and, in the case of a sale, must be given to a prospective buyer as soon as practicable and before transfer of title. In the case of a transfer by a real property sales contract (as defined in Civil Code Section 2985) by a lease coupled with an option to purchase, or by a ground lease coupled with improvements, the TDS is to be delivered before the execution of any of the foregoing.

The seller and any broker(s)/agent(s) involved are to participate in the disclosures. If more than one broker/agent is involved, the broker/agent obtaining the offer is to deliver the disclosures to the prospective buyer unless the seller instructs otherwise.

Delivery to the prospective buyer of a report or opinion prepared by a licensed engineer, land surveyor, geologist, structural pest control operator, contractor, or other expert (dealing with matters within the scope of the professional’s license or expertise) may limit the liability of the seller and the real estate broker(s)/agent(s) when making required disclosures. The overall intention is to provide meaningful disclosures about the condition of the property being sold or transferred.

(Cal. Civ. § 1102.4)

The "form" that follows in the linked text, is a formal form that has never been delivered from Esposito to Troescher.

That part of the above new text that is yellow highlighted makes it clear that the disclosure form being referenced here includes one required to be given to the buyer/optionee in a lease-option agreement BEFORE EXECUTION of the lease-option agreement. This, of course, was not done.

The question may still be answered in the text, but arises here: "What if the seller of real property is also a licensed realtor? Does he have the realtor's obligation to disclose?

Here is a slightly related item related to fraud in lending:

Rules for Detecting Fraud:

The general rules for detecting fraud are simple:

SALES CONTRACT

* Seller is realtor, employer, or relative of borrower (non-arm's length transaction). (source)

Here is a reference to a seller (no mention of his being a realtor) being required to provide the same form as a realtor. Click here for the PDF form. (as usual with PDF files, adjust to "fit width" for best viewing.)

The form (form 304) is the same as called for by a realtor or owner (makes no difference whether the seller is the owner or a realtor representing the owner?). This still provides that the buyer must complain within 3 days (five if mailed).

 

SECTION 1102.3 OF THE CIVIL CODE PROVIDES A BUYER WITH THE RIGHT TO RESCIND
A PURCHASE CONTRACT FOR AT LEAST THREE DAYS AFTER THE DELIVERY OF THIS
DISCLOSURE IF DELIVERY OCCURS AFTER THE SIGNING OF AN OFFER TO PURCHASE.
IF YOU WISH TO RESCIND THE CONTRACT, YOU MUST ACT WITHIN THE PRESCRIBED
PERIOD.

 

The above link includes the following relative to property taxes. This could be construed to show that the seller, under a lease-option, is required to notify the county assessor so that an increase in property taxes is made. It could also suggest that if the seller avoids telling the county assessor, when/as the buyer takes title, the assessor would trace the transaction back to the date of the agreement, and put a lein on the property now owned by the new owner, or the old owner could simply flee, leaving the new owner to pay the taxes for several years when the transaction had not been reported. Failure to disclose this danger to the buyer would seem to be a serious non-disclosure, and would not necesarilly become known by the buyer until time of exercise of option.

6.   Property Taxes

New legislation effective January 1, 2006, requires a seller or his or her agent to deliver to the prospective purchaser a disclosure notice that includes both of the following:

(1)  A notice, in at least 12-point type or a contrasting color, as follows:

"California property tax law requires the Assessor to revalue real property at the time the ownership of the property changes. Because of this law, you may receive one or two supplemental tax bills, depending on when your loan closes.

The supplemental tax bills are not mailed to your lender. If you have arranged for your property tax payments to be paid through an impound account, the supplemental tax bills will not be paid by your lender. It is your responsibility to pay these supplemental bills directly to the Tax Collector.

If you have any question concerning this matter, please call your local Tax Collector's Office."

(2) A title must be included in at least 14-point type or a contrasting color that reads as follows:

"Notice of Your 'Supplemental' Property Tax Bill."

The disclosure notice requirements of this section may be satisfied by including the required information in the Mello-Roos disclosure (see Part I, Section I, Subsection A, Item 5 – Mello-Roos Bonds and Taxes). Supplemental taxes may be assessed whether a new loan is obtained or an existing loan is assumed to accomplish the purchase of the property, or whether the property is purchased without financing.

(Cal. Civ. §1102.6c)

Here is a section of the disclosure text that suggests that the seller was obligated to provide certain information to the buyer -- this was not done. In fact the smoke dector was non-operational when Troescher moved in, Troescher asked that the device be repaired, and Esposito never did that. There were two years of no working smoke dector in place.

C.  Smoke Detector Statement of Compliance

Whenever a sale (or exchange) of a single family dwelling occurs, the seller must provide the buyer with a written statement representing that the property is in compliance with California law regarding smoke detectors. Some local ordinances impose more stringent smoke detector requirements than state law. Therefore, local city or county building or public safety departments should be consulted regarding smoke detector requirements.

The State Building Code mandates that all existing dwelling units have a smoke detector installed in a central location outside each sleeping area. In a two-story home with bedrooms on both floors, at least two smoke detectors would be required.

New construction, or any additions, alterations or repairs exceeding $1,000 and for which a permit is required, must include a smoke detector installed in each bedroom and also at a point centrally located in a corridor or area outside of the bedroom(s). This standard applies for the addition of one or more bedrooms, no matter what the cost.

In new home construction, the smoke detector must be hard-wired, with a battery backup. In existing dwellings, the detector may be battery operated.

(Cal. Health & Safety § 13113.8; Cal. Building Code § 1210; State Fire Marshall Regulations 740 et. seq.)

Here is a requirement that the seller certify that the hot water is "braced for earthquake." It was not and Troescher hired a repair man to install those braces. No certification form was ever provided by Esposito:

L.   Certification Regarding Water Heater’s Security Against Earthquake

The seller of any real property containing a water heater must certify in writing to a prospective buyer that the water heater has been braced, anchored or strapped to resist falling or horizontal movement due to earthquake motion. The minimum standard for this security is set forth in the California Plumbing Code, which may be more restrictively amended by local or municipal code or ordinance. The certification can be included with the Homeowner’s Guide to Earthquake Safety, in the Real Estate Purchase Contract or Receipt for Deposit, or with the Real Estate Transfer Disclosure Statement.

(Cal. Health & Safety § 19211)

The text goes on:

Section II
Disclosures Required of Real Estate Agents
in the Transfer of Residential Real Property

Although this section relates to an agent’s duties and responsibilities, the seller may be responsible for disclosures concerning the condition of the property to the same or greater extent than the seller’s agent(s). The seller may also be responsible for those disclosures required by law that his/her agent(s) for that purpose fail(s) to make.

. . .

B.   Agency Relationship Disclosures

To provide an explanation of agency relationships and duties, the law requires that a real estate broker disclose in writing the general duties which arise from certain agency relationships. Additionally, the broker’s status as agent of the seller, agent of the buyer, or agent of both the seller and buyer (dual agent) is to be disclosed to the principals of the transaction who must consent to the agency relationship(s) disclosed. This requirement applies to the sale, exchange, or lease (for more than one year) of real property improved with 1 to 4 dwelling units, or the sale of a manufactured home (as defined in Health and Safety Code Section 18007).

The required agency disclosure form includes the following specific language:

DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP
(As required by the Civil Code)

. . . .

. . . .

When the seller is a realtor, selling his own property, it would seem that he has the obligations of both a seller and a realtor representing the seller. The disclosure of what is the agency relationship between Esposito and himself as owner/seller and as a licensed broker would seem to be required to be disclosed:

SELLER’S AGENT

A Seller’s agent under a listing agreement with the Seller [When the seller IS a realtor, it would seem he automatically has the equivalent of a listing agreement wiacts as the agent for the Seller only. A Seller’s agent or a subagent of that agent has the following affirmative obligations:

To the Seller:

(a)   A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller.

To the Buyer and the Seller:

(a)   Diligent exercise of reasonable skill and care in performance of the agent’s duties.

(b)   A duty of honest and fair dealing and good faith.

(c)   A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties.